Nokia May Lose Smartphone Lead to Samsung, Apple

Nokia Corp. has been the smartphone leader for over a decade now and has been the world's largest supplier of mobile phones in general as well. However, the recent actions by the management of the company significantly lowered popularity of Nokia's handsets among operators and end-users. As a result, in Q2 2011 the company may lose its crown to Samsung Electronics and even Apple.

"Nokia has led the smartphone market since it launched the first Communicator in 1996. From Q2, however, it looks as if it will fall to third place, behind Samsung and Apple. We forecast that Nokia will continue to weaken relative to these two names and could even be overtaken by HTC by late 2012," wrote Stuart Jeffrey of Nomura Equity Research citing his own findings and preliminary numbers from leading market trackers.

In particular, Nokia's 25% smartphone market share in Q1 2011 is projected to drop to 16% in Q2 2011, which will be behind Samsung's predicted 20% and Apple's 18% in the first quarter.

Given that sales of Nokia Symbian-based smartphones started to collapse following Nokia's announcement of intention to adopt the least popular Microsoft Windows Phone 7 operating system in mid-February, and other actions performed by the company's chief exec Stephen Elop further reduced the popularity of Nokia's devices among operators, it is very likely that Nokia will lost its volume leadership in the second quarter of 2011.

"Market shares in mobile phones have swung greatly in prior years and so a come-back from Nokia is feasible, in our view. However, we see no evidence of a product led turnaround and continue to see better opportunities among Asian vendors in particular," added Mr. Jeffrey.

Smartphones is only one of Nokia's problems. The company does not have a clear roadmap for its simplistic phones in place. Meanwhile, its handset market share in the low-end segment is also decreasing.